What taxes do foreigners doing business in Ukraine have to pay?

Doing business in Ukraine can be profitable for foreigners, but it is important to understand what tax obligations are imposed in certain cases. Find out which taxation system is best for foreign businesses and how to optimize taxes

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Ukraine is an attractive country for doing business due to its relatively low taxes and promising market. Foreigners can set up companies in Ukraine and operate on equal terms with citizens. However, it is important to understand the tax system and business obligations before starting work.

💡Don't know what form of taxation to choose for your business?

Contact Visit Ukraine business lawyers! Our experts will answer all your questions and provide support in the process of registering a business in Ukraine.

What organizational and legal forms of business can foreigners choose in Ukraine?

Foreign entrepreneurs can do business in Ukraine in the following forms:

1. Individual entrepreneur (IE) - a simplified form for small businesses.

2. Limited Liability Company (LLC) - the most popular form for medium and large businesses.

3. Representative office of a foreign company - for activities without registering a new legal entity.

Sole proprietorship, LLC or E-residency: what to choose for a foreigner to start a business in Ukraine, read the previous article.

What taxes does a business have to pay in Ukraine?

1. Taxes for individual entrepreneurs

Individual entrepreneurs can operate under the general or simplified taxation system.

Simplified system (single tax)

An individual entrepreneur can choose one of the following groups:

● Group 1 - 10% of the subsistence minimum (UAH 316 per month in 2024).

● Group 2 - 20% of the minimum wage (UAH 2684 per month).

● Group 3 - 5% of the income (without VAT) or 3% (with VAT).

In addition, a sole proprietor pays a single social contribution (SSC) of 22% of the minimum wage (starting from UAH 1782 per month in 2025) and a military fee.

General system

A sole proprietor on the general taxation system pays:

● Personal income tax (PIT) - 18% of net income (income minus expenses).

● Military duty - 1.5% of net income.

● Unified social contribution - 22% of income, but not less than the minimum amount (1782 UAH/month).

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2. Taxes for LLCs

An LLC can operate under the general or simplified taxation system.

General taxation system

Main taxes:

● Corporate income tax - 18% of net profit.

● VAT - 20% (mandatory for companies with annual revenues over UAH 1 million).

● Withholding tax - 15% (if dividends or royalties are paid to a non-resident).

Simplified system (3rd group of the single tax)

● 5% of income without VAT or 3% with VAT.

● Unified social contribution for employees - 22% of the salary.

Additional taxes and fees

Land and real estate tax - for companies that own or lease real estate.

Excise tax - for businesses that sell excisable goods (alcohol, tobacco, fuel).

Peculiarities of taxation for non-residents

Foreign companies operating in Ukraine may be subject to withholding tax. In addition, when paying dividends or royalties to other countries, international agreements for the avoidance of double taxation apply.

How to optimize taxes?

Doing business in Ukraine is possible and profitable for foreigners if you choose the right taxation system and take into account all the nuances. At the same time, the choice of taxation system depends on the type of activity, turnover and business structure. If you are planning to start a business in Ukraine, you should consult a lawyer to choose the best form of business and taxation system.

Contact Visit Ukraine specialists to get professional help! Our experts will answer all your questions and, if necessary, accompany you at every stage of business registration in Ukraine.

We remind you! Investing in Ukraine opens up prospects for foreigners, but requires knowledge of some legal aspects. Read more about the legislation, tax benefits, forms of investment and guarantees of investor protection in Ukraine in our previous article.

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